The transition of Value Research Online has been postponed to take care of some user concerns.
You are welcome to try out the new site at

Holding companies that are worth holding

Maharashtra Scooters & TIC are two holding companies that can turn out to be good alternate investments if used well

  • TweetTweet
  • LinkedinLinkedin
  • FacebookShare

There are certain inherent advantages that holding companies have. Typically these companies own assets and rarely have active business operations. When analysing holdings of listed companies, we came across two interesting stock ideas, which if used well could become good alternate investments. Both Maharashtra Scooters and Tata Investment Corporation (TIC) hold investments in several Bajaj group and Tata group companies. TIC also has investments in several non Tata group companies.

Get updates from Value Research in your inbox

Both these companies are trading at huge discount to their investment value which is up to 50 per cent. The huge discount coupled with high dividend yield serve as investment opportunity to indirectly invest in the Bajaj or Tata group companies. However, all good things come with a caveat; you need a lot patience to invest in holding companies to realise value.

Tata Investments
In all TIC has investments in 130 listed companies, a large many of them being Tata group companies. The market value of these investments add up to R3,422 crore or an NAV of R815 per share whereas TIC's share price is R411; a 50 per cent discount. If you are bullish on the Tata group companies and other underlying companies, then your investment in this stock will gain and you will also receive healthy dividends, which at 3.9 per cent is a cushion in a falling market.

Maharashtra Scooters
Maharastra Scooters (MSL) is jointly held by the Bajaj group and the Western Maharashtra Development Corporation (WMDC). MSL used to manufacture scooters for Bajaj, which it stopped doing from 2006. Now the company manufactures some components for Bajaj Auto but the major portion of its earnings is in the form of dividends from its underlying investment in five Bajaj companies. Huge discount to its underlying assets and high dividend yield of 4.7 per cent can be a fruitful investment in the long run. Bonanza value unlocking can come if Bajaj buys WMDC's stake which it has been trying for since 2004.

Are you missing an opportunity to invest in great stocks at low valuations? There are thousands of listed companies in India and yet only a handful that are worth investing at a particular time and at a particular price.

Our equity team has sifted through hundreds of companies and selected stocks that you should invest in. This list now has 37 stocks on it, and new ones are being added every month. Thousands of our members are using stagnant equity markets to buy great stocks at low prices. Membership of Value Research Stock Advisor is available at a 40% to 60% discount. Learn more and become a member

comments powered by Disqus